Conservatives relish Abe’s election success

Japan makes a good conservative role model for other countries, according to a political journalist reacting to the general election.

Through a coalition of his party and supporters, Shinzo Abe has the support of around 80% of parliamentarians.

 
Conservative ideal

Stephen Bush wrote in the New Statesman’s blog that “Japan is in many ways offers the ideal target for meeting Conservative aspirations”. He notes the resounding success of Mr Abe’s right-wing Liberal Democratic Party, bolstered by the prime minister’s tough talk on defence, his emphasis on economic stability and his low immigration approach. Stephen Bush also says that Japan is “politically free of the destabilising movements that threaten the right in the UK and elsewhere.”

Koike’s challenge

Japanese voters’ inclination towards stability helps explain why the LDP nearly always wins elections. However, there was an attempt to destabilise the political status quo recently, when the Tokyo governor Yuriko Koike launched a new party. The challenge fizzled out when she decided not to run for parliament herself.

Populism

Analysing the election result on the BBC, Professor Seijiro Takeshita from the University of Shizuoka said opposition parties lacked credibility and were “full of short-term populism”. He also said that politicians in Japan balk at saying “harsh things that voters don’t want to hear”, such as raising tax to tackle the national debt.

North Korea

Other issues in the media are Japan’s relations with North Korea, Mr Abe’s efforts to reform the constitution and the state of the Japanese economy. Mr Abe has said that he will “firmly deal with North Korea using strong diplomacy”. The BBC’s Tokyo Correspondent Rupert Wingfield-Hayes said that “Mr Abe’s approach so far is to talk tough, request more missile defence for Japan and to stick close to President Trump.” But he said that Japan does not have much leverage. “It has no relations with North Korea, it has no trade and it has a poor relationship with China, so it’s hard to see what other options are available,” he said.

Constitutional reform

The Financial Times suggests that Mr Abe’s remaining years in office will focus on amending the constitution’s so-called peace clause, in which Japan renounces the threat or use of force in settling international disputes. Mr Abe’s election success has built him enough support in parliament to propose a re-write of the constitution.
Abenomics

The Prime Minister will also want to continue his programme of Abenomics. There has been some measurable success, with Japan’s GDP now growing at its best rate for a decade. The unemployment rate has also fallen but inflation is stuck at zero and there remains the unresolved issue of rising national debt. Professor Takashita believes the third arrow of economics, one targetted at structural reform, “is still floating through the air”.

Third Arrow Graded D

The Nikkei Asian Review is harsher: it believes the third arrow is completely off course and it gives a “D” grade to the structural reform aspect of Abenomics. “There has been progress in improving the business environment including lowering corporate tax rates, promoting corporate governance and enhancing overseas economic partnerships. But efforts to boost labour productivity, leverage foreign workers and deregulation the medical, nursing care and other sectors have borne little fruit,” says the Nikkei.

Cheating scandals mar Japan’s reputation

Kobe Steel CEO Hiroya Kawasaki. Photo: Getty Images

This week, the international media has been filled with articles condemning Japanese business culture after another high profile scandal.

Kobe Steel has admitted it falsified safety records for products supplied to more than five hundred companies, including Japan’s biggest automotive firms and train manufacturers.

Decades of cheating

The Nikkei newspaper reported that the cheating went on for decades, with the knowledge of some of Kobe Steel’s senior managers.

Several journalists noted alarming similarities between the scandal at Kobe Steel and one at Nissan, which has had to recall every new car it sold in Japan in the last three years after it falsified safety checks.

Suzuki and Mitsubishi Motors have faced scandals over fuel economy tests on their vehicles. In addition, there was recently a major scandal at Toshiba, which tried to hide the extent of the financial problems within its nuclear power division.

Crisis in Japan Inc

The Financial Times says that “after a concentrated two year outbreak of corporate scandals… (there is) a crisis in Japan Inc.”

The FT quoted Shin Ushijima, a lawyer and corporate governance expert. “Did we not learn anything from Toshiba? What was Kobe Steel’s board doing?” he asked.

It was a theme picked up in an analysis of Japan by the BBC’s Ashleigh Nghiem in Singapore.

He suggests that Japan’s reputation as “a shining example of integrity, assured quality and reliable products” has been severely undermined by the scandals.

The BBC quoted the opinion of Takuji Okubo of Japan Macro Advisors, in Tokyo.

“Large corporations used to live in a stable, predictable and growing market, but things have changed and some companies may have resorted to cutting corners,” said Mr Okubo.

Lower Standards

Reuters also takes the view that a shrinking domestic market and increased global competition is tempting some Japanese manufacturers to lower their standards. The agency quotes Professor Thomas Clarke who warned that Japan runs the risk it will “lose out as other Asian economies, including China, progressively raise their standards of quality and reliability.”

However, Reuters also suggests that some of the scandals have come to light because of greater scrutiny of companies’ behaviour. “It may be a sign that the government’s push to improve corporate governance is seeing greater disclosure of wrongdoing,” says Reuters.

Yet the stock market booms

Despite the headlines of shame and scandal, investors appear optimistic about the Japanese corporate sector. The stock market in Tokyo has been booming, along with other major world bourses.

The Wall Street Journal says that if you look at the numbers corporate Japan seems “alive and well”. The WSJ says “business confidence is booming, exports are recovering and industrial production picked up last month. Japanese corporate profits hit their highest ever level in the second quarter. All that is fueling this year’s stock-market rally.”

“We work hard but we’re not productive enough”

Pulling Japan out of a trap of low productivity is “the number one goal” of the central bank, according to one of its most senior figures.

The Deputy Governor of the Bank of Japan Mr Hiroshi Nakaso told a gathering in London that Japan continues to lag behind most developed countries in terms of productivity and that this is a major concern to the bank and to the government.

Golden opportunity

The Bank of Japan regards productivity as as an important of way of assessing the efficiency of businesses.

It therefore measures the hours people work and tries to judge the economic value of their efforts.

The labour shortage, which is caused by an ageing and shrinking population, has created a very low unemployment rate in Japan of only about two percent. As a result, companies often struggle to find enough candidates to fill their job vacancies.

But Mr Nakaso claimed that “the current serious labour shortage could be a catalyst for improved productivity” and that therefore there “we have a golden opportunity to upgrade Japan’s economy.”

“We have a golden opportunity to upgrade Japan’s economy.” Hiroshi Nakaso, Deputy Governor, Bank of Japan

Inflation hope

Mr Nakaso hopes employers will respond by offering higher wages and will adopt a more efficient and productive approach to work.

He cited the example of a trucking company which has recently raised wages and put up prices for its customers. He said such measures would help nudge inflation towards the Bank of Japan’s target of two percent.

But he acknowledged that such situations were relatively rare, even though “improving productivity is precisely what the third arrow of Abenomics is aiming for.”

White collar challenge

Speaking to an event hosted by the Japan Society at the Guildhall in the City of London, Mr Nakaso claimed that Japanese factories are among the most efficient in the world, so the productivity challenge is most acute in the non-manufacturing sector “which employs white collar workers like me.”

Some economists have suggested that Japan’s productivity would rise if if brought more women and older people into the workforce, or opened the door to more immigrant labour. However, Mr Nakaso said that it is “unrealistic” to see those measures as a complete solution to the problem. “Even if we did all those things, we would not be able to achieve the 2.9% increase in productivity we need to achieve our goal of two percent GDP growth,” he said.

Jobs for life

He said another challenge is the lack of mobility within Japan’s workforce, which makes many people reluctant to change their jobs. This is a legacy of the jobs-for- life culture which developed during Japan’s post-war boom years.

“Long term contracts between companies and workers prevent mobility,” said Mr Nakaso. He noted that greater labour mobility leads to greater productivity in many developed countries and it can help with the spread of new ideas, working practices and technology.

He said companies respond to the labour shortage in a variety of ways, such as reducing their opening hours, automating payment systems or being less generous in providing benefits to customers which are not profitable.

A new dawn

Mr Nakaso finished with offered an upbeat view of contemporary Japan which he said runs counter to the gloomy impression often left by the media. He cited the current tourist boom, an increase in leisure time and the rise in life expentancy.

He also said that that there are now more than 200 Michelin starred restaurants in Tokyo.

“The public perception is based on old statistics,” said Mr Nakaso. “I admit that there have been false dawns in the past but this time we believe that after a long night, the new dawn is near,” he said.

Political storm sweeps through Tokyo

A former TV presenter who was heralded as Japan’s first potential female prime minister has announced she is not yet ready to do battle for the top job.

Yuriko Koike is promising a populist approach, challenging the vested interests of Japan’s male-dominated establishment.

However, she has decided that she is not yet prepared to quit her powerful position as governor of Tokyo in order to stand for the national parliament. She cannot become the country’s prime minister unless she first becomes an MP. The general election will take place on October 22nd.

Party of Hope

Ms Koike recently established a new party Kibo no To, or Party of Hope. Its is designed to upset Mr Abe and his ruling coalition, which was struggling to enthuse voters after a series of corruption scandals.

Nevertheless, Mr Abe calculated that a victory for his Liberal Democratic Party (LDP) is all but assured in the forthcoming election – partly because it nearly always wins and also because the main opposition party – the Democratic Party (DP) – appeared too weak to put up a fight.

Mr Abe appeared to be proved right when the DP imploded after Ms Koike mounted a challenge. It announced it would field no candidates for the election. Some of its members then defected to Ms Koike’s Party of Hope.

Opposition weakness

The Democratic Party’s collapse leaves voters with a narrower range of political choices. Normally, the Democratic Party offers a more left-wing set of policies than the LDP and is regarded by Japan’s neighbours, such as South Korea and China, as less nationalistic and more cooperative than the LDP.

The Party of Hope’s policies are significantly further to the right than the Democratic Party and Ms Koike’s own political roots lie in the LDP. She says she is committed to “reform conservatism” – including a reform of the clause in Japan’s constitution which commits the country to a form of pacifism. That irks some politicians on the left of the Democratic Party, who claim that constitutional reform runs against public opinion and will create further problems with China.

North Korea threat

Stephen R. Nagy – a politics professor at the International Christian University in Tokyo – used an opinion piece in the Japan Times to suggest that many voters support Mr Abe’s tough position on defence and security because of North Korea’s recent belligerence as well as Chinese behavior in the East China Sea and South China Sea.

Mr Abe claimed that he called the election to deal with a “national crisis”. Yet although the escalating threat from North Korea could be regarded as a “crisis,” domestically, the situation is calm. Its economy is growing at the fastest rate for two years. Unemployment is very low and by many measures, it remains one of the richest and most peaceful countries in Asia.

Populism and women

In response to Ms Koike’s populism and in particular her appeal to female voters, Mr Abe has responded with what he hopes will be popular policies of his own. These include a push to provide free childcare for three-to-five-year-olds, paid for partly by a rise in consumption tax in 2019. Although this might win him favour among some younger voters and women, it creates additional expenditure which will hamper him from achieving his stated goal of achieving a budget surplus by 2020.

The decision to raise spending was described as “extremely regrettable” by Yoshimitsu Kobayashi, the chairman of the Japan Association of Corporate Executives. It also emphasises the temptation to be profligate facing a leader who has become used to lavish spending in a wealthy economy supported by enormous debt.

Abe claims “crisis” demands a snap election

Is it true that Japan needs of an election to deal with a “national crisis?”
That’s the claim made by Prime Minister Shinzo Abe, who has called a snap election to take place soon – probably on October 22nd.

The escalating threat from North Korea could well be seen as a “crisis” situation.
Domestically, however, things are calm in Japan. Its economy is growing at the fastest rate for two years. Unemployment is very low and by many measures, it remains one of the richest and most peaceful countries in the world.

The Asahi Shimbun newspaper, which is not generally supportive of Mr Abe or the ruling Liberal Democratic Party (LDP), says the prime minister’s opponents were “left flustered” by his portrayal of Japan as a nation in crisis.

The Asahi says suggests that Mr Abe is dissolving the Lower House of the parliament in order to avoid questions about political scandals and allegations of corruption.

However, the widespread view in the press, supported by a poll by the Nikkei newspaper, is that Mr Abe is in a good position to win the election because the opposition parties are so weak. Mr Abe’s LDP is supported by 44 percent of voters, with the opposition Democratic Party of Japan on only eight percent.

The Financial Times suggests that Mr Abe will fight a populist campaign, aimed at exploiting a weak opposition rather than winning a mandate for painful economic reforms or drastic constitutional change. For example, Mr Abe has said there’ll be a big push to provide free childcare for three-to-five-year-olds, paid for partly by a rise in consumption tax in 2019.

Another candidate for the role of Japan’s prime minister – the governor of Tokyo, Yuriko Koike – may be better placed to claim the populist ticket.

Although Ms Koike’s background is in the LDP, she presents herself as a challenger to the vested interests and the status quo. She has named her new political party Kibo no To (“Party of Hope”).

So for many voters, the election presents a choice between returning Mr Abe for a fourth term or voting for change and Japan’s first female prime minister.

The press often portrays Mr Abe as a nationalist, provoking bad feelings with Japan’s neighbours, China and South Korea. A detailed profile of Mr Abe was prepared by AFP and ran in the Daily Mail under the headline: “Shinzo Abe – Nationalist blueblood at home, shrewd diplomat abroad.”

It points to his efforts to build relationships with Donald Trump and Vladimir Putin, while pushing a nationalist agenda domestically.

Another question is whether his policy of Abenomics, designed to restore Japan’s economy, is working. With recession now out of the picture and activity related to the 2020 Olympic Games ramping up, the situation looks bright.

And Abenomics is set to continue, especially its first two “arrows”. That means more massive economic stimulus through public spending and no tapering of the expensive asset-purchasing scheme, conducted by the Bank of Japan.

We don’t trust China’s win-win rhetoric, warns ambassador

A lack of trust and an underlying threat of violence are harming China’s relations with Japan, according to Japan’s former ambassador to Beijing.

 

Masato Kitera represented Japan in China from 2012 until 2016.

He claims that when Chinese people tell him collaboration creates a “win win” situation, he hears them saying to Japan “we win.”

 

“I don’t believe it when the Chinese say win-win. I’ve heard it many times. China often says the relationship is advantageous for both Japan and China. But when Chinese people say win-win my ears only hear we win.”

Violent threats

Mr Kitera said that at the start of his tenure as ambassador there was a wave of violent anti-Japanese protests in China, including attacks on the Japanese Embassy and Japanese-owned factories.

He said that when he called on Chinese leaders to denounce the violence “no-one agreed with me.”

Mr Kitera, who is now Japan’s ambassador to France, was speaking at Chatham House, the Royal Institute for International Affairs in London.

Challenge or opportunity 

He was taking part in a debate on whether China’s economic growth was an opportunity or a challenge for Japan.

“I see it as both,” he said, noting that although Sino-Japanese diplomatic relations are cool at the moment, the Chinese government nevertheless encourages ongoing Japanese investment to stimulate its economy.

More than 23,000 Japanese companies operate in China, employing more than 10 million people. Mr Kitera said that for that reason, the economic relationship is important to both countries. He said he would encourage Japanese companies to invest long-term in China in order to “gain leverage.”

China’s debt to Japan

Ambassador Kitera said that Japan’s investment in China in the 1970s and 1980s had formed the basis for its economic transformation. “Today’s economic development would not have been possible without Japanese support,” he said.

However he said that Japanese investors in China should “be mindful of the risks” and he said that President Xi Jinping’s recent claim that China was a champion of free trade was “met with an ironic smile.”

He claimed that tariffs and duties are applied inconsistently, creating pressures on Japanese businesses operating in China.

China’s denial

The speech met with a robust response from Mr Kitera’s fellow panellist at Chatham House, Professor Jia Qingguo from the Department of Diplomacy at the School of International studies at Peking University.

He challenged Mr Kitera’s dismissal of the frequently used phrase “win win.”

“I don’t like it when you say you never believe what the Chinese people say,” Professor Jia told Ambassador Kitera. “It’s like a joke. Maybe some people don’t say what they mean but this is not a fair statement. A lot of people – when they say “win win” – they mean it.”

Peaceful coexistence 

Professor Jia pointed out that many Japanese companies choose to remain in China, despite the complex relationship.

“China and Japan were enemies and now we are at peace. We co-exist peacefully,” said Professor Jia. “We are economically interdependent. Our relationship has its problems but I believe it is still a win-win relationship.”

The panel on China was part of a conference at Chatham House entitled Anglo-Japanese Cooperation in an Era of Growing Nationalism and Weakening Globalization. The event was on the record and the discussion was moderated by Isabel Hilton, the editor of chinadialogue.

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Hitachi weathers the Brexit storm

It will soon be possible to catch a Japanese bullet train along one of the most scenic and stormy coastal rail routes in England.

Hitachi is building special waterproof trains which will be able to run along a track beside the sea in Devon in Southwest England, where gale-force winds often blow seawater onto the line.

The the new Class 802 Intercity Express Trains, which will run from London Paddington to Exeter, Plymouth and Penzance from next year, have been designed to withstand the storms.

Hitachi a Japanese company with deep links to Britain and its presence is felt in many regions.

It is a major player in the UK’s railway industry. Hitachi trains, known as Javelins, carry passengers from London St Pancras station to the Southeast coast of England at great speed.

Now Hitachi Rail is bidding for a £2.75 billion contract to build trains for the planned HS2 high-speed railway which will connect London, Birmingham, Manchester and Leeds. The government says HS2 will boost the economy but its cost has been challenged by opponents.

If Hitachi wins the HS2 deal, it plans to build the trains at its factory in County Durham in the Northeast of England. That could create hundreds of new jobs in a region which has been affected by industrial decline.

Julia Potts from Hitachi Rail says: “Train building is a craft. There is a lot of manual work which cannot be done by robot or machine. We can produce great quality trains here but we depend on skilled people.”

British politicians are delighted that Hitachi intends to keep producing jobs in the UK, especially in regions where unemployment is a problem. Another example of the company’s commitment to Britain is a new laboratory for Hitachi High Technologies in Daresbury near Liverpool, where it will develop sophisticated electron microscopes. Elsewhere, Hitachi Construction Machinery has a successful factory in Hebburn in Northeast England which makes excavators and dump trucks.

Naturally, there are concerns over Brexit. Japanese companies which invested in Britain, including Hitachi, expected to use the UK as a gateway to Europe’s single market and will be impacted by Britain’s exit from the EU. Prime Minister Theresa May spoke to Hitachi’s chairman Hiroaki Nakanishi about the issue during her visit to Tokyo earlier this month. She said Britain would seek a free trade agreement with Japan following Brexit, although the time scale is unclear.

Hitachi’s success in Brexit depends not so much on the Brexit as its future role in major infrastructure projects, such as HS2 rail. It also plans to build nuclear power plants in Wales and is expecting substantial financial support from the Japanese government.

Hitachi and other Japanese companies which build nuclear plants are focussed on winning foreign work following the Fukushima disaster, which has led to a suspension of new reactors within Japan. This puts Japanese companies in competition with Chinese rivals. However Britain has signed deals with both Asian countries. Hitachi’s Welsh project will be matched by a huge Chinese nuclear power plant at Hinkley Point in England, with both plants expected to come on line at some point in the next decade.

Does macho Japan oppress its talented women?

Some people regard Japan as a macho society, where powerful men work long hours, play golf and ignore the house work while the women do menial office jobs or stay at home to raise children.

Such stereotyping is common in the international media, which often presents a rather pitiful image of Japanese women, suggesting that they are oppressed by men and lag far behind their western sisters in terms of gender equality.

I have often felt this rather negative picture is based on misunderstandings and fails to appreciate the warm and affectionate relationships which thrive between men and women throughout Japan.

Womenomics

Nevertheless, the role of women is changing and the Japanese prime minister, Shinzo Abe, has outlined a policy of “womenomics” to encourage more organisations to promote women to top level jobs. In the past few years, women have reached unprecedented positions in public life, such as Leader of the Opposition, Defence Minister and Governor of Tokyo.

This week, I attended a symposium about gender at SOAS, part of the University of London. SOAS asked a team of experts what social changes they have observed since the enactment of Japan’s Equal Employment Opportunity Law in 1986.

“The changes seem slow in comparison to the United States or the UK; they do not amount to a revolution. Yet things are changing, partly due to demographics,” said Professor Machiko Osawa, Director of the Research Institute for Women and Careers. She noted that the shrinking pool of working age people due to the ageing population creates more job opportunities for women. She also said she would like to see more legislation, education and career development programmes so that women and men can reach similar levels of income and responsibility.

Women “don’t want to work like men”

Another theme of the symposium was how to create working environments in which both men and women are productive and happy. Professor Peter Matanle from the School of East Asian Studies at University of Sheffield noted the workplace pressures facing Japanese men.

He claimed that half the overtime that men do is unpaid. He also said: “Men also have unpredictable career patterns, so that they are transferred at short notice to other parts of the country or abroad, away from their family and without their consent.”

Professor Matanie said that his research shows that many women in Japan choose not to take full-time regular employment because “they don’t want to work like men.”

Professor Matanie condemned the culture of long hours which permeates many Japanese organisations, saying it undermines productivity and efficiency.

His views echo those of Tokyo’s governor, Yuriko Koike, who said recently that long hours are not appropriate to the modern era and have a negative impact on people’s life–work balance. Governor Koike has initiated a programme within the Tokyo Metropolitan Government to reduce overtime – a move which she hopes will benefit people who want to spend more time with their families.

Fulfilment

The symposium’s moderator Professor Helen Macnaughtan, who teaches at SOAS, acknowledged that in some respects “the gender dividend difference has worked rather well for Japan” and cautioned against stereotyping Japan as a society which is as “anti-women.” She explained that many women gain satisfaction from fulfilling traditional roles, such as raising children.

However, Professor Macnaughtan bemoaned the fact that many well-educated women drop out of their careers because they find their work frustrating and restricting. She also criticised a system which traps many married women in low-paid jobs.

What are your views on gender in Japan? Does there need to be more social change to create equality in the workplace? How do you think the role of women is different from other countries in Asia or the rest of the world?

Please share your thoughts below.

British PM May reassures Japan on Brexit & Security

When the British prime minister Theresa May stepped off the plane in Osaka at the start of her first official visit to Japan, she wore a red and white outfit to match the colours of the country’s national flag.

It was a gesture of goodwill to the UK’s largest Asian investor at a time when the relationship between Britain and Japan has been strained by Brexit. Mrs May set out her agenda before taking tea with her Japanese counterpart Shinzo Abe in Kyoto.

“I’m going to talk to Mr Abe about the future relationship between the United Kingdom and Japan and about how we can build upon what is already a good strong relationship in the areas of security, defence and trade,” she told journalists.

Will she stay as PM?

Her agenda was upset by British reporters’ questions about how long she would remain as prime minister and if she would lead her party, the Conservatives, to fight the next general election.

However, the business community in Japan has limited interest in Britain’s domestic politics. It is much more interested in how Mrs May will lead Britain out of the EU and what the deal with Europe will look like at the end of the process. Under current plans, Britain is set to leave both the single market and the customs union, putting future trade with the EU in jeopardy.

“Anxious and bewildered”

This has left Japanese companies “bewildered and anxious,” according to Professor Seijiro Takeshita from Shizuoka University.

More than a thousand Japanese companies have offices registered in Britain, employing around 150,000 people. Many of them chose the UK as a base from which to reach the market of the European Union.

Professor Takeshita says that the Japanese companies are frustrated by the slow progress in the Brexit negotiations. “The longer those talks take, the more the Japanese companies in the UK will look to relocate parts of their business to the continent,” he says.

The head of Nissan, Carlos Ghosn, has also said that long-term investment by Japanese companies in Britain will be affected by its relations with the EU. Nissan has a large factory in the North East of England, a region which was strongly in favour of the Brexit.

Reassurance

The British government has tried to reassure Japanese businesses that Britain will be open to trade with other parts of the world after it leaves the EU and it that stands ready to agree a free trade deal with Japan.

However, this promise has often been met with scepticism. Stephen Porter, an art dealer with links to Japan, says: “The Japanese are terrified of losing access to the world’s biggest free trade area. Many Japanese companies based themselves in Britain specifically because they, quite reasonably, thought that doing so would give permanent access to the EU.”

Mr Porter, a founding partner of Arthistorical in London, warns that: “Mrs May could well be publicly humiliated if Shinzo Abe openly expresses – as well he might – the widely-held view in Japan that Britain has unfairly reneged on its commercial commitments by allowing the Brexit to happen.”

Banks on the move

Another concern is the possible departure of banks and financial institutions from London to continental Europe. Hideki Kishida, a Senior Economist at Nomura Securities, observes that “some financial institutions have already announced that they are prepared to move a certain number of jobs from London to the European continent to retain the single passport system which enables them to operate within the EU. That is not good for the UK.”

The goal for Mrs May is to secure an agreement from Japan for a free trade deal, like the one Japan has recently agreed in principle with the EU. Yet Britain is constrained from entering such negotiations with Japan until the Brexit process is completed. Likewise, Japan wishes to settle its arrangements with the Europeans before it starts talk with the British.

Common Ground 

Professor Takeshita from Shizuoka University hopes that when the UK-Japan talks eventually start, the two sides will quickly find common ground. “There is a lot of similarity in terms of values and ideology of trade and business between the Britain and Japan and that should help the FTA talks,” he says.

Furthermore, Japanese companies are keen to invest abroad, provided the political and economic risks do not appear too severe. Since the start of 2017, profits at Japanese companies have been rising in Japan alongside a rise in value for the yen and this motivates many cash-rich Japanese firms to expand overseas. Provided Britain avoids a deep recession and the Brexit negotiations remain track, it should remain a relatively attractive investment destination for Japanese companies.

Defence pledge

Aside from trade, Prime Minister May also declared the UK’s support for Japan’s defence objectives, including its bid for a permanent position on the United Nations Security Council. She visited an aircraft carrier in Tokyo and announced that UK troops would soon take part in joint military exercises in Japan, the second country to do so after the US.

The tense situation in East Asia was emphasised when North Korea fired another missile near Japan just before Mrs May arrived in Osaka. The Prime Minister condemned the action but the UK is a relatively minor player in the region and has little ability to influence affairs on the Korean peninsula.

Why can’t China and Japan be friends?

As China prepares to decide who will lead the country for the next five years, the rhetoric against the Chinese Communist Party is growing louder in some sections of the international media.

This week, Japan’s right-wing nationalist newspaper the Sankei used its website Japan Forward to interview a political activist who claimed that: “Asia is now being steadily colonised again, not by the West but by the Chinese Communist Party.”

The Japan Times, which generally takes a more moderate approach towards China, ran a strong editorial condemning Communist attempts to censor academic articles about Chinese history.

And the Financial Times has drawn its readers’ attention to the close grip the Communist party has on Chinese businesses and its power over the foreign firms doing business in China, including Japanese companies.

Cool relationship

This autumn, the inner circle of the Chinese Communist Party will meet to decide if Xi Jinping will remain its general secretary for the next five years, or if another man will lead the nation.

Japan hopes that China’s leader will be friendly because China is Japan’s largest trading partner and their economic fortunes are closely linked. Diplomatically, though, the relationship between them remains extremely cool.

China often blames this problem on Japan’s prime minister, Shinzo Abe, who it regards as a provocative nationalist. However, in terms of foreign policy and business, Mr Abe generally takes a very internationalist approach, as illustrated by the recently brokered free trade deal with the EU.

Friendship and Alliance

The problem, as China sees it, is Japan’s close link to the United States. Mr Abe has maintained friendships with both Presidents Obama and Trump and last week, Japan’s Defence Minister Itsunori Onodera visited the US Defense Secretary Jim Mattis in Washington. They confirmed their commitment to the military alliance.

That sends a message that the US stands ready to defend Japan if it is attacked by North Korea. However, China loathes the idea of America playing a greater military role in East Asia.

“Crippling Sanctions”

That has been made clear to the politicians and business leaders of South Korea. In the wake of the growing belligerence from North Korea, the South Korean government has agreed to deploy an American anti-missile defense system known as THAAD.

China has responded by imposing sanctions on South Korea which could “cripple its economy” according the website, The London Economy.

Japan wishes to avoid any such problems with China, especially if they affect the many Japanese-owned factories on the mainland.

Yet Prime Minister Abe’s government takes the view that the alliance with the US is of more value to Japan’s long-term security than a friendly relationship with the powerful Chinese Communist Party.